Exorbitant Costs In Canada Prompts Toyota To Shift Corolla Production To Mexico

Five years from now, the 2020 model of Toyota Corolla could be possibly built no longer in Canada but in Mexico. Toyota Motor Corp has reportedly cited Canada’s exorbitant costs as reason for the shift.

A report by the Globe and Mail states the operational costs at the company’s assembly plants in Ontario are far higher to maintain than at its U.S. factories. Toyota instead will have its Canada hubs to focus on making the company’s more expensive vehicles.

“Mid-sized, higher-value vehicles” will be the focus of production at the Cambridge, Ont., the company said in a statement. The "higher-value models" include the RX, the Sequoia and Highlander SUVs, the Sienna van, Avalon and Camry sedans.

Toyota will invest $1 billion in Mexico to build its car factory. It is expected to become operational in 2019. Still, Toyota promised to continue to make significant new investments over several years in its assembly plants in Cambridge and Woodstock, Ontario for its Mid-sized, higher-value vehicles.

The vehicles expected to be built at the Mexico plant could be patterned after Mazda's newer models, which weighs less, has better mileage, better performance as well as better handling compared to the older models, USA Today reports, citing Jim Lentz, CEO for Toyota North America. He told the paper the new releases by 2020 will be "better looking." It will use lightweight materials and enhanced gasoline engine technology, thus result to "a lower centre of gravity, better ride and handling, lighter weight for better fuel efficiency."

The Mexico plant in Guanajuato will require 2,000 workers to produce 200,000 Corollas annually for North America, with some geared for export.

Toyota likewise announced in a separate disclosed that it will be soon having its third assembly line next to its plant in Guangzhou, China. The project is worth $440 million. It will be completed by 2017.

CTV News reports Mexico and China have been chosen for the company’s new investments because of the auto demand projected to rise exponentially in the two countries in the coming years.

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